The Regional Economic Growth Project (REG), funded by the USAID Europe and Eurasia (E&E) Bureau in Washington, is being implemented by SEGURA Consulting, with Deloitte Consulting and CEED as subcontractors. During the project’s three year period of performance (with two option years), REG will work to promote broad based, inclusive and sustainable economic growth in the E&E region through greater intraregional economic integration and harmonization in the E&E region and other markets. Project activities will focus on improving competitiveness and increasing financial sector stability by promoting economic integration within the region and building economic linkages to the EU and other markets. The REG Project will seek to provide a cost effective platform for demand driven high quality trainings and will introduce international best practices in private sector skills and financial sector management and regulation. REG's activities are organized under two main components.
Increased private sector competitiveness and enterprise development
REG will undertake interventions that identify and strengthen agriculture and non-agriculture value chains on a regional basis, promote sectors regionally and internationally, improve workforce skills through standards and certification programs and further entrepreneurship training and services. Activities to strengthen regional value chains will include trade facilitation to ease the movement of goods and services, through dialogue between responsible public institutions and participation of the representatives of the private sector and, also, facilitating the simplification of necessary documentation. REG will also build the capacity of the private sector to effectively advocate for a business enabling environment that will increase the possibilities of intra-regional and international exports and growth. These efforts will also seek to improve governance, increase transparency and reduce corruption, thereby reinforcing governance objectives in the region.
Increased financial sector stability, growth and inclusion
Under Component 2, REG will seek to strengthen the supervisory capacity to implement international best practices in the most pressing area, such as deposit insurance, and assist financial sector practitioners to navigate regional and international systems, with a goal of improving financial sector stability. Activities will, also, be undertaken to facilitate introductions of best practices and new financial products in access to finance for SMEs, such as ease of collateral restrictions and non-banking financial instruments.
YEAR ONE REGIONAL STRATEGIC PLANNING MEETINGS
Between October 2013 and February 2014, REG held a series of meetings in Belgrade, Skopje, and Tbilisi to discuss and choose activities to be included in the REG work plan. The meetings were attended by REG's Chief of Party, USAID/Washington representatives, Economic Growth officers from the USAID missions in countries where REG is active, and other project stakeholders. The purpose of the events was to get an overview of the economic issues in each individual country, priorities of each USAID mission, as well as regional issues that could be of interest to the broader group and could lend themselves to interventions under REG. Based on these discussions, the REG team drafted and finalized the REG Work Plan for Year 1, outlining project activities to be undertaken during the 2014 calendar year.
REG INITIAL ASSESSMENTS
Since the project start in late September 2013, REG has been conducting a series of preliminary assessments, to identify regional and country-level needs, and map providers of business services that can be used to answer those needs. The specifics of each of the assessments undertaken so far are outlined below.
Western Balkans Stakeholder Survey:
REG conducted a survey of key stakeholders in the region in order to expand information on opportunities and constraints to growth of the priority sectors. The team developed a questionnaire, conducted interviews with key stakeholders, analyzed and systematized the answers and prepared a report. Priority sectors selected were: Tourism; IT; Agribusiness; Footwear manufacturing; Food manufacturing; and Manufacturing of vehicles and parts thereof. Identification of IT Quality Standards and Certifications:
REG is undertaking two surveys to identify the key IT industry standards and certificates that have impact on the quality of processes and productivity on the companies. Possible IT certification models include: Kanban, SCRUM&XP, CMMI, PSP, ITIL, ITMark, ISO, Cyber Security and Resilience Management, and others.
REG designed, administered and analyzed a survey to identify and prioritize technical needs in leading agriculture/agribusiness sub sectors to develop new export opportunities by giving better understanding of export trade circumstances and key constraints, in standards and certifications, that impedes fresh and processed fruit and vegetable (F&V) producers and exporters in the region.
Non-Banking Financial Institutions Assessment:
The REG team plans to measure the potential impact on growth and credit availability that could ensue from reforming the legal and regulatory environment for nonbank financial institutions (NBFIs) in the Balkans. To expand on the concept paper, in the coming months, REG will complete a comparative regional study of NBFI’s in each Western Balkan country in which REG operates.
Regional Study of Collateral Valuation Methods and Regulations:
The REG project will commission a comparative regional study of real estate valuation frameworks in the project’s five Western Balkan countries to identify the gaps and weaknesses with respect to international standards and best practices and to develop a set of proposed programming activities to address these challenges.
Skills Gap Analysis:
The goal of the skills gap analysis is to identify skills that are in demand in labor markets across the region, in specific sectors such as IT, agriculture, or tourism, in the Balkans. The analysis will:
- Present existing skills gaps per sector
- Present a list of programs such as vocational education, retraining programs, and certifications training, that could be used to fill those gaps, and
- Present a list of service providers in the region in the areas of certifications.
Non-Tariff Barriers Regional Study:
This study carried out by the REG Project will identify specific NTBs to intra-regional trade in Georgia, Armenia and Azerbaijan to develop awareness and greater understanding of their impact among stakeholders and provide support to the regional working groups to reduce or remove the NTBs. An NTB Report will be generated for each country and the findings presented at a regional trade facilitation event.
ENTREPRENEURSHIP | Regional Introduction to Angel Investment
The Regional Introduction to Angel Investment Workshop, organized by REG in cooperation with partners from Serbia – Impact HUB Belgrade (Candidate), Serbian Venture Network, SEE ICT, Serbia ICT NET / Centre of Innovation Excellence, Vojvodina ICT Cluster, Nis NiCAT Cluster, Nis Center of Excellence and Innovation and StartLabs, took place on February 25, 2014 at the Hotel Metropol Palace in Belgrade.
More than 100 participants attended the workshop, including angel investors, representatives of business support organizations/NGOs (accelerators, centers of innovation, incubators, clusters, and associations), start-ups, private companies, donor support organizations/projects, investment funds, and government institutions from the region and beyond.
The first part of the workshop was focused on business support organizations, and keynote speaker David Beatty, angel investor and Managing Director of Golden Seeds (www.goldenseeds.com), presented on angel investor networks and groups. The second part of the day was targeted at potential angel investors and explained the basics of the investing process, including the risks associated with each step, and methods to manage those risks in order to maximize results. The third session was a practical case studies session with group exercises. The day concluded with a business networking event which provided opportunities for participants to establish and enhance their relationships.
Reactions to the workshop were tremendously positive, with a participant consensus that Angel Investment was a timely and relevant topic. Participants are already discussing the next steps and are keen to work further on developing angel investment sector throughout the region.
The primary objective of the WTO Trade Facilitation Agreement (TFA) is to streamline the movement of goods across borders, thereby stimulating increased trade and economic growth. To pursue that goal, USAID is supporting National Trade Facilitation Self-Assessments utilizing a WTO-developed methodology. The self-assessments are intended to determine with which provisions WTO members can comply immediately, and with which they need more time or assistance. Macedonia’s self-assessment, which was co-organized and co-funded by the USAID Regional Economic Growth Project, the USAID Investment Development and Export Advancement Support (IDEAS) Project in Macedonia, and the Ministry of Economy of the Government of Macedonia, took place in Skopje during the week of March 24th-28th, 2014. Participants included 37 representatives from the Ministry of Economy, the Macedonia Customs Administration, the Ministry of Foreign Affairs, Ministry of Justice, the Food and Veterinary Agency, Health and Sanitary Inspectorate, Agriculture Inspectorate, as well as private sector representatives from Macedonia’s Chamber of Commerce.
The self-assessment was conducted using a guide based on the text of the TFA, and was facilitated by international experts. The results will assist Macedonian representatives to prepare more effectively for the TFA implementation process, to identify areas where outside support may prove valuable, and to assist in implementation of the Agreement.
The Government of Macedonia (GoM) is committed to utilizing the results of the self-assessment, and to ensure eventual complete compliance, the assessment contributors plan to prepare briefing documents for the GoM about the current situation as well as needs and priorities going forward. Additionally, all participants agreed to widely distribute the results of the self-assessment to stakeholders for additional review and comment.
TOURISM | Introduction to REG’s Tourism Activities
REG will build upon the Regional Competitiveness Initiative (RCI)'s successes in the tourism sector. RCI initiated and supported over 20 networking, capacity building, promotional and business-enabling events which opened doors for great partnerships, joint initiatives and professional friendships. USAID will continue to support tourism development activities in the Western Balkans through REG. Among the expected goals of the project are: new multi-country tourism products, expansion of the regional tourism network, service providers capacity improvement, increased number of business partnerships with hotels, restaurants, guides as well as local, national, regional and international organizations, associations, agencies and operators. In order to support that goal, REG has planned the following activities into its 2014 work plan:
Regional Tourism Product Development:
Evaluation of market-readiness of existing and competitiveness of existing and potential regional tourism attractions, develop the structure of five multi-country thematic products, develop and implement action plan for the improvement/ development of existing attractions/itineraries, develop and implement marketing guidelines for the new products.
Marketing and Promotion of Western Balkans as a joint destination/ cooperation with ATTA: Identification of linkages with international associations to enhance the visibility of the destination, AdventureWEEK (Albania, Kosovo and Macedonia) preparation and implementation, preparation and visit of Adventure World Travel Summit, preparation for Regional Adventure Travel Summit.
Introduction of AHLEI certification program, organization and implementation of AHLEI trainings, organization and implementation of ATTA trainings.
Other activities include:
Western Balkans Regional Tourism Network expansion; identification of existing and potential calls for proposals for EU and development of regional proposals; and identification of cost sharing models for all activities.
ENTREPRENEURSHIP | #FTW Regional Kick-off in Tbilisi
#TbilisiFTW (Tbilisi for the Win!), an event for investors and entrepreneurs, took place on April 15 and 16, 2014, and was organized by the USAID REG Project in cooperation with Teres Capital, StartupWiseGuys, String Ventures, and Netokracija.
#TbilisiFTW, the first in a series of #FTW community events throughout the region, brought together over 100 participants, including: entrepreneurs, investors, and facilitators in Europe and Eurasia. #TbilisiTFW had the following goals: providing access to best practices for early-stage entrepreneurs; assisting local private and angel investors to professionalize and grow their syndicates; and building capacity of community organizers and innovation centers to improve services, outreach, and effectiveness.
The first day of the event consisted of lectures and panels by experienced entrepreneurs, investors, and community managers. Another main activity was a pitching contest, where nine regional entrepreneurs/startups pitched to a jury panel. The prize for best pitch, a pre-selection to attend StartupWiseGuys’ next accelerator program, went to Thruthly.me, which is an Armenian-based social network where people can anonymously tell their friends and family members things they cannot say in person. More info on the site can be found at www.truthly.me/en-US. Following the pitch,day one ended with a net- working session where investors, startups, speakers, and other guests exchanged comments, ideas, and contacts informally.
The second day was aimed at current and aspiring angel and venture investors. Activities consisted of talks by experienced local investors, who relayed practical experience from accelerator, incubator, and excellence/entrepreneurship center activities.
Reactions to the event were enthusiastic, both the entrepreneurs and the investors appreciated the chance to expand their networks, and would like to see similar events organized more often so that the ecosystem may develop further.
Chief of Party
This newsletter is produced by USAID’s Regional Economic Growth REG; Implemented by SEGURA Consulting LLC.